The Economic Value of Citizenship for Immigrants in the United States

Citizenship is widely recognized as an important symbol of full membership and participation in society. By naturalizing, immigrants receive a range of rights and prerogatives available only to citizens. Naturalized citizens can vote and run for public office; they receive protection from deportation and from losing their residence rights; and they enjoy other rights, such as the ability to bring family members more quickly to the United States, full access to public benefits, and visa-free travel to many countries.

Surveys suggest that political and social rights — particularly the right to vote — are the primary motivation for naturalizing, alongside the desire for a sense of belonging. However, citizenship is also thought to provide economic benefits, including access to job opportunities that are not open to noncitizens. Certain government jobs and licensed professions require citizenship (the vast majority of immigrants holding public-sector jobs are naturalized). And some employers may treat citizenship as a signal of good integration into US society or otherwise discriminate against noncitizens when hiring.

This report analyzes the impact of naturalization on immigrants, as well as the motivations for seeking citizenship and the barriers to doing so. Among the key findings:

. For a variety of reasons, naturalized citizens earn more than their noncitizen counterparts, are less likely to be unemployed, and are better represented in highly skilled jobs. Naturalized citizens also appear to have weathered the effects of the economic crisis more successfully, experiencing a decline in median annual earnings of 5 percent from 2006 to 2010, compared to 19 percent for noncitizens and 8 percent for the US born. As a result, the earnings gap between naturalized and noncitizen immigrants increased from 46 percent to 67 percent over the same period.

. Most of the gap between citizens’ and noncitizens’ outcomes is explained by the fact that naturalized immigrants have higher levels of education, better language skills, and more work experience in the United States than noncitizens. Even after accounting for these differences, however, there is some evidence that the naturalized may earn a wage premium of at least 5 percent. This premium is thought to be larger for Latino immigrants and for women.

. Despite the potential economic and other benefits of citizenship, far fewer immigrants naturalize than are eligible to do so. An estimated 8 million lawful permanent residents (LPRs)— representing about two-thirds of the total LPR population and two-fifths of the total foreign-born population — are eligible to apply.

. Immigrants are more likely to naturalize if they have high levels of education, speak English well, and have been in the United States for a long time. Refugees and other immigrants from politically troubled countries also naturalize at higher-than-average rates. By contrast, immigrants from high-income countries are less likely to seek US citizenship despite higher levels of education and language proficiency, perhaps because they perceive US citizenship as providing fewer benefits relative to their existing nationality.

. Naturalization rates in the United States are lower than in most other countries in the Organization for Economic Cooperation and Development (OECD), largely because of the significant number of unauthorized immigrants who are not eligible to apply for citizenship. The share of eligible immigrants who have naturalized is higher than most OECD member countries but still lags behind other English-speaking receiving countries such as Australia and Canada, which have made more active attempts to promote naturalization.

. Barriers to naturalization include low English language proficiency, lack of knowledge about the application process, and the cost of applying, which at $680 is higher than in most other OECD countries.

Citizenship is an important milestone along immigrants’ journey toward full political and economic membership in their host society. At this point, immigrants receive the complete range of rights accorded to the native born, most notably the right to vote in national elections. By naturalizing, immigrants also gain a range of practical benefits, including security from deportation, access to certain public-sector jobs, and the ability to travel abroad on a US passport.

All immigrant-receiving countries in the industrialized world provide a route for immigrants to become citizens through naturalization. During the naturalization process, aspiring citizens must typically demonstrate that they have achieved a certain level of integration into the host society by meeting eligibility criteria or taking tests. However, naturalization is also a tool that can be used to encourage and facilitate further integration — a point along the journey rather than the culmination of the integration process.

About two-fifths of the United States’ 40 million immigrants held US citizenship in 2010, a share that had risen from just over 30 percent in the early 1990s (see Appendix).1 Among the remaining noncitizens, an estimated 44 percent were unauthorized, and hence not eligible for citizenship. Another 18 percent were lawful permanent residents (also known as green-card holders) but had not been in the country long enough to be eligible. However, a substantial share of the noncitizen population — about 8 million, according to the Department of Homeland Security (DHS) — was eligible to apply but had not done so.